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Schneiderman: Contractors Who Underpay Workers Will Be Held Accountable

NEW YORK - Attorney General Eric T. Schneiderman today announced the resolution of an investigation into Masonry Services, Inc. (“MSI”) and its owners, James S. Herrera and Jaime T. Herrera, for underpaying masonry workers on the St. Marks Project. Developed under the New York City Department of Housing Preservation and Development (HPD), the St. Marks Project was a publicly funded affordable housing facility for seniors in the Brownsville neighborhood of Brooklyn. The Attorney General’s agreement requires MSI to pay back wages totaling $575,000 as well as $25,000 in costs.

“My office will continue to pursue contractors who illegally underpay workers, whether it’s on a small scale or in a larger settlement like this one,” Attorney General Schneiderman said. “Contractors who work on publicly-funded affordable housing projects must comply with all applicable laws, plain and simple. MSI will be held accountable for failing to meet its obligations to hard-working New Yorkers, in addition to paying back the wages owed to its workers.”

The St. Marks Project received public funding, triggering the requirement that workers must be paid the prevailing wage. Prevailing wage laws seek to ensure that government contractors pay wages that are comparable to the local norms for a given trade. The law requires an hourly rate for construction work performed for public agencies that is well above the state and federal minimum wage of $7.25 per hour, along with certain additional benefits.

Between June 2009 and July 2010, the masonry workers on the St. Marks Project were paid between $8 and $23 an hour – well below the applicable prevailing wage rates – and were not paid overtime despite regularly working more than 40 hours a week.

In addition to securing restitution for underpaid workers, the agreement also requires MSI, James S. Herrera and Jaime T. Herrera to pay for independent monitoring of MSI’s labor practices on private and public construction projects for three years, with unannounced on-site inspections. Moreover, in the event of any future public works violations, MSI, James S. Herrera and Jaime T. Herrera consent to be placed on the New York State debarment list, preventing them from working on New York State public works projects for five years.

“Today’s action sends another clear signal to anyone wishing to work on publicly funded jobs in New York – using taxpayer money to exploit workers will not be tolerated,” said Robert Bonanza, business manager of the Mason Tenders District Council. “For too long, too many contractors have operated in open defiance of the prevailing wage laws, which protect workers from unscrupulous employers, whose only goal is to profit at the expense of honest hard-working New Yorkers. On behalf of the members of the Mason Tenders District Council, I want to thank Attorney General Schneiderman and his office for their role in bringing MSI and its owners to justice. Unfortunately there is still much work to be done to clean up HPD.”

Hector Figueroa, president of 32BJ SEIU,said, "While there are many responsible developers in this city, there are others who will use public funding to enrich themselves at the expense of hard-working New Yorkers. We deeply appreciate the work of Attorney General Eric Schneiderman’s office in holding these lawbreakers accountable and returning the money owed to these workers.”

Today’s settlement with MSI follows two other cases brought by Attorney General Schneiderman this year involving underpayment of workers on HPD projects. On March 4, the Attorney General announced a $980,000 settlement with Procida Construction Corp. to resolve an investigation into underpayment of wages by Procida and one of its subcontractors at two HPD projects in Brooklyn. On March 7, A.G. Schneiderman announced the arrest and arraignment of Applied Construction Inc. owner Mohammad T. Riaz and two of his employees on felony grand larceny charges in connection with a scheme to avoid prevailing wage laws. The defendants in that case are accused of underpaying workers on HPD projects in the Bronx with cash payments, failing to provide supplemental benefits to workers and directing some workers to return portions of their wages.

The investigation of MSI and its owners was conducted by New York Attorney General Senior Investigator Salvatore Ventola and Supervising Investigator Andres Rodriguez, under the supervision of Supervising Investigator Kenneth Morgan and Deputy Chief Vito Spano.

The case was handled by Assistant Attorney General Benjamin Holt, under the supervision of Labor Bureau Section Chief Andrew Elmore, Bureau Chief Terri Gerstein, Executive Deputy Attorney for Social Justice Alvin Bragg and First Deputy of Affirmative Litigation Janet Sabel.

Anyone who is aware of a violation of workplace rights in New York State, whether as a victim or a concerned witness, is encouraged to file a complaint with Office of the Attorney General by filling out a complaint form or by calling the Labor Bureau at 212-416-8700. Please note that filing a complaint with the Labor Bureau is not the same as starting a court case or filing a complaint with the federal or New York State Department of Labor.